Hey, friends hope you are well, and welcome to the new update on Bitcoin (BTC).
Breakout the triangle and re-testing the price level resistance:
Previously the price action was moving between the resistance and the support of a symmetrical triangle and we had 1st a fake-out to the downside, then the price action reversed back into the triangle and broke out the resistance of the triangle, retested the previous resistance as a support, and moved to the upside. Now the price action is retesting the price level resistance as support at $39500. If the price will be close below this support then it will be critical.
Rising Wedge:
If we place some trend lines, then it is identified that the price action has also formed a rising wedge pattern on the daily time frame, which is a bit critical because it is considered as a bearish reversal pattern among the trader's community. If the price action will be moved at the support of this rising wedge pattern, then it can reach $38,000. And if it will be moved at the resistance of this pattern then we can expect a move upto $43K.
Expected buying signal of DMI and the EMAs:
Now if we watch the directional movement index (DMI) on a daily time frame then it can be observed that there is a very small distance remaining between the +DI (blue line) and the -DI (orange line).
Once the blue line will cross up the orange line, then it will be a buying signal. Then we will need the ADX to move up to show the power of bulls.
The price action has broken out the EMA 21 and EMA10 as well. Now the exponential moving average 10 is going to form a bull cross with EMA 21, while price action is above the EMA 10 and 21, which is a very powerful buying signal. After a long time, we are going to recieve this signal.
But after the bull cross between EMA 10 and EMA 21 daily, we also need the blue line of the DMI indicator to cross up the orange line, otherwise, if the EMA10 will cross the EMA21 and we will not receive the buying signal by Directional movement index indicator, then it can be a bull trap as we have already seen this in the previous history of Bitcoin.
Conclusion:
The price action of Bitcoin may move down to the support of rising wedge and can also use the daily 25 SMA support as well. However, once we will receive the buying signal by the combination of the daily EMAs 10 and 21 and the Directional movement index then a powerful rally to the upside can be started.
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